MalaysianStates_AnalysisGDPandInvestment_web (1).pdf

ECONOMIC/THEMATIC RESEARCH:
Prepared by:
Lynette Lee
Mazlina Abdul Rahman
Syed Mohamad Bukhari Syed Bakeri
SMEBank-EconomicResearch@smebank.com.my
(603) 2615 2020
MALAYSIAN STATES’
ANALYSIS
GDP & INVESTMENT

Sources: CEIC, Department of Statistics Malaysia (DOSM), Malaysian Investment Development Authority (MIDA) and SME Bank Economic Research
However, only 4 out of 14
states have returned to pre-
pandemic level GDP…
Note 1: States include Kuala Lumpur Federal Territory.
Note 2: Latest available GDP data by state are as of 2021 while investment are as of 2022.
…where the recovery wasn’t
standardized across sectors
5 out of 14 states
outperformed national GDP
growth rate
Regardless, mining sector
remain a laggard in all states
Wholesale & retail trade, F&B
and accommodation dominate
services sector in 8 states…
…while government services
lead services sector in Perlis and
Kelantan
8 states focus on E&E and
optical products as their main
manufacturing activities…
…while petroleum, chemical,
rubber & plastic dominate
manufacturing sector in Melaka,
Pahang, Terengganu and Sarawak
Johor made up the largest share (17%) of
total manufacturing investment, followed by
Pulau Pinang (16%) & Selangor (15%)…
Investment in manufacturing sector
recorded at RM84 bil, 57% short of
what it was in 2021
…may have been propelled by investment
in E&E as it is the focus industry
Some states (e.g. Kedah, Negeri Sembilan &
Melaka) identify aerospace as emerging
industry and provide opportunities
• Extend tax incentives to mfg. companies
that move operations to Malaysia
• 15% tax rate to C-Suites until 2024 to
attract investment into Malaysia
• Extend income tax incentives &
investment tax allowances until 2025
Summary of Malaysia GDP and Investment
2

131,056
2.4
9.5
25774
2.4
1.9
35152
3.6
2.5
55,354
0.9
4.0
98,964
6.8
7.1
47,471
3.2
3.4
76,780
3.5
5.5
343,501
5.0
24.8
47,696
3.0
3.4
41,814
2.0
3.0
GDP (RM mil)
Share to MYS GDP (%)
GDP Growth (%)
78,760
1.1
5.7
131,175
2.9
9.5
7,629
0.5
0.6
5,866
1.5
0.4
218,233
0.8
15.7
Note: W.P. Kuala Lumpur includes W.P. Putrajaya
• Malaysia’s GDP growth advanced to 8.7% YoY in 2022, up from 3.1% in 2021 (2020: -5.5%).
• Growth in 2021 was mainly contributed by Selangor (1.2 ppt.), Pulau Pinang (0.5 ppt.) and
Sarawak (0.3 ppt).
• In terms of annual growth rate, Pulau Pinang (6.8% YoY), Selangor (5.0%) and Terengganu
(3.6%) grew the most from 2020 levels and have also performed above national level.
Gross Domestic Product (GDP): Malaysia
3 Sources: CEIC, DOSM and SME Bank Economic Research

*Supra state covers production activities that are beyond the center of predominant economic interest for any state
Services
Mining &
Quarrying
Construction
Manufacturing
Agriculture
17.1
14.6
13.1
12.6
11.9
3.3
2.8
2.0
1.0
0.1
Top 5
Bottom 5
SUPRA 44.7
29.7
21.9
0.8
0.7
0.1
0.1
0.1
0.0
0.0
32.0
13.9
12.1
11.0
5.3
1.8
1.8
0.4
0.4
0.1
34.3
23.5
8.9
6.7
5.0
2.0
1.8
0.8
0.3
0.3
25.9
24.8
8.6
6.0
5.9
2.6
2.3
2.3
0.8
0.5
State’s share to GDP (%) by Sector, Top 5 & Bottom 5
• Selangor has the biggest contribution in construction (34.3%), manufacturing (32%) and services (25.9%) sector. The gap with the 2nd largest contributor in
both manufacturing & construction is quite substantial. Despite having vigorous E&E activities and being top exporter of the country, Pulau Pinang’s manufacturing
share is not even half of Selangor’s.
• Johor contributes the most in agriculture and followed closely by Sarawak. Sarawak also dominates mining & quarrying sector.
Sources: CEIC, DOSM and SME Bank Economic Research
4

Note: Data are average of 2022 except for GDP per capita & unemployment rate in 2021
Johor & Pulau Pinang exports the most in 2022, reflecting their
roles in global supply chain.
Highest inflation in Putrajaya (7.3%) and Selangor (4.2%),
exceeded national level of 3.4% in 2022.
KL GDP per capita is 2.6x above national figure but remain
below pre-pandemic level (RM129.7k)
Sabah has the highest unemployment rate
but it also has one of the largest number of employment
Key Indicators: Malaysia
Sources: CEIC, DOSM and SME Bank Economic Research
5

• More global companies are establishing their
global service hub in KL due to robust
infrastructure and dynamic pool of talent, among
others – reflects high dependency on services
sector (90% of GDP) – which continue providing
support to economic growth moving forward.
• Some of the latest presence were British public-
listed software development company Endava
Plc, and Baxter Southeast Asia.
• Moreover, government has mandated Tun Razak
Exchange (TRX) as Malaysia's international
financial hub to attract high quality foreign
investment from the global financial industry.
• Besides that, Microsoft Corp has announced
plans to establish its first data centre region in the
country – USD1 bil (RM4.12 bil)
commitment/investment to Malaysia over the next
5 years – include building and setting up the data
centre.
• KL’s economy has not fully recovered to pre-
pandemic level, (-6.7% YoY vs 2019). All four
sectors remain below 2019’s level.
• Assuming GDP grow by 4.2% for the next 4 years
(2022-2025), it will still fall short of 12MP target
(RM265.2 bil in 2025) by circa 3.0%.
Kuala Lumpur’s GDP growth underperformed national level GDP and its 12MP average growth target of 4.2%.
Kuala Lumpur GDP breakdown by sector
SERVICES
MANUFACTURING
AGRICULTURE MINING CONSTRUCTION
YoY %
Share %
0
50
100
150
200
250
Total Mi Ma C S
RM mil
KL GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
3.1
0.8
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: KL vs Malaysia (%YoY)
Malaysia Kuala Lumpur
- -3.1 1.6
4.3 -12.1
- 0.1 2.7 5.5 90.0
Wholesale & retail trade, food &
beverage and accommodation
Finance & insurance, real estate and
business services
Government services
Utilities, transportation & storage,
information and communication
Subsectors
0.8
0.5
5.8
4.0
39.8
28.7
14.7
12.2
Other manufactures
E&E and optical products
Vegetable & animal oils & fats, food
processing, beverages & tobacco
Wood products, furniture, paper
products and printing
Subsectors
1.6
7.5
11.4
-2.8
36.1
24.5
16.5
13.4
YoY % YoY %
Share % Share %
Note: 12MP average growth for 2021-2025
Economic Profile: Kuala Lumpur (KL)
Sources: CEIC, DOSM, Economic Planning Unit (EPU) and SME Bank Economic Research
6

Top manufacturing investments in 2021:
• Manufacturing approved investment in KL contracted by -49.9% YoY in
2022 (2021: -78.7%), in line with national level (-56.8%)
• KL’s low investment in manufacturing sector is consistent with its share to
national manufacturing GDP (0.2% in 2022).
• This is in line with its focus industries which are skewed more to regional
business & shared service centres, logistics, transportation, &
mobility, digital economy, e-commerce, green tech, etc.
• In 2021, KL secured RM2.46 bil in investments through 13 global
services hubs by leading multinationals (MNCs) and fast-growing
companies – making it the best performing year in the last decade.
• State government has targeted RM35 bil of investments by 2030
(currently based on available data: RM18.3 bil since 2011).
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Paper, printing & publishing 95.0 0.0 95.0
Food manufacturing 54.8 0.0 54.8
Chemicals & chemical products 36.6 1.6 38.2
Plastic products 34.4 0.0 34.4
Textiles and textile products 21.8 2.7 24.4
Transport equipment 5.0 0.0 5.0
Fabric metal products 0.8 0.0 0.8
Other 25.7 0.0 25.7
Total 274.1 4.3 278.4
Ongoing/Upcoming Key Projects
AstraZeneca global business services hub (2023)
Bukit Bintang City Centre Phase 2 & 3 (2025)
Arnott’s Group (food mfg) Asia Hub 3-stage expansion
Microsoft Data Centre (2026)
1
2
3
Investment opportunities: Kuala Lumpur (KL)
4
Sources: CEIC, DOSM, MIDA, InvestKL and SME Bank Economic Research
Note: Latest available data for mfg. approv. investment by state and industry is in 2021.
7

0
100
200
300
400
Total A Mi Ma C S
RM mil
Selangor GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
• Selangor has the highest share in construction
GDP (34.3%) but the sector has yet to return to
its pre-pandemic level in 2021.
• Nonetheless, the performance is anticipated to be
more brisk from 2022 onwards benefitting from
full economic reopening along with various
development and mega projects (e.g. LRT3,
KVDT II, West Coast, redevelopment of Shah
Alam stadium) – spill over effects to other sectors
such as transportation and sports & amusement
& recreation activities.
• Real estate activities remains on recovery path
and continue to offer opportunities to the state –
Selangor dominated the market, accounting for
about 24% of total residential property
transactions in Malaysia in 3Q 2022
• Selangor’s economy remains slightly below pre-
pandemic level, (-0.4% YoY vs 2019).
• Nonetheless, manufacturing sector has
recovered while agriculture was not affected
significantly in the first place.
• Selangor seems to be on track in achieving
12MP target of RM404 bil in 2025.
Selangor’s GDP growth outperformed national level GDP and its 12MP average growth target of 4.3%.
Selangor GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
3.1
5.0
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: Selangor vs Malaysia
(% YoY)
Malaysia Selangor
4.9 -3.0 2.2
13.1 -6.6
1.4 0.2 31.4 5.1 59.5
business services
Government services
Subsectors
0.5
4.2
2.7
5.7
35.6
29.5
18.7
9.1
Other manufactures
Petroleum, chemical, rubber and
plastic products
Subsectors
22.0
6.8
23.6
9.2
29.3
23.4
18.5
16.1
YoY % YoY %
Share % Share %
Economic Profile: Selangor
Sources: CEIC, DOSM, EPU and SME Bank Economic Research
8

• Manufacturing approved investment in Selangor doubled by 62.5% YoY in 2022
(2021: -59.2%), in contrast to national level (-56.8%).
• It has also surpassed RM10 bil target set by the state government. Share to total
manufacturing approved investment also went up to 12.2% (2021: 7.5%) – the 3rd
largest recipient by state.
• In 2021, the biggest contributor (29.1%) came from rubber products, followed
by chemicals & chemical products (17.3%) and E&E (15%), broadly in line
with some focus areas of the state, namely 1) E&E and 2) Life sciences which
include specialty chemicals.
• Additionally, 2 new industries (logistics services & digital investment) have
been identified – have the potential to boost Selangor as an investment
destination.
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Rubber products 2,135.6 47.6 2,183.2
Chemicals & chemical products 1,170.2 130.5 1,300.7
Electrical & electronic products 284.6 844.6 1,129.2
Basic metal products 164.7 74.4 239.1
Furniture & equipment 104.8 26.2 131.0
Others 366.8 123.2 490.0
Total 6,052.8 1,458.3 7,511.0
4 new schools: SK Cyberjaya 2, SMK Denai Alam, SMK
Johan Setia, SK Setia Alam
LRT 3 (expected to complete in Feb 2024)
Rasau water treatment plant (June 2025)
Klang Valley Double Track Phase II (2026)
West Coast Highway (2026)
ECRL (Dec 2027)
Selangor Maritime Gateway (2031)
1
2
3
4
5
6
7
Investment opportunities: Selangor
Sources: CEIC, DOSM, MIDA, Invest Selangor and SME Bank Economic Research
12.2
84.3
0
5
10
15
20
25
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Selangor vs Malaysia
Selangor Malaysia Shares (RHS)
9

• Expected to be fully completed by the end of 2024, except for a 10 km
stretch from Section 7B which is expected to be completed by June 2026.
• An economic catalyst for small towns in both Selangor and Perak.
• Provide opportunities for manufacturers and SMEs to relocate their
factories to areas along the new highway as time taken to get to these
areas will be reduced.
• Additionally, there will be many opportunities for small businesses to grow
especially tourism related.
Investment opportunities: West Coast Expressway
Sources: www.selangormaritimegateway.com and SME Bank Economic Research
10

• Price of commodities remain supportive to
Sarawak’s continuous recovery but severe labor
shortage particularly in the palm oil sector remain
a major concern.
• Besides that, ongoing mega projects such as
Sarawak Coastal Road and Pan Borneo
Highway will provide further support to the state’s
recovery.
• Government also plan to develop cities bordering
Kalimantan, Indonesia such as Ba'kelalan,
Sarawak.
• Moreover, there are significant rooms for
developing basic infrastructure – roads, bridges,
water & electricity supply, and telecommunication
network.
• Development project of Halal Hub Center at
Tanjung Manis – will develop competitiveness
and sustainability of local companies – to offer
quality, innovative and competitive halal products
• Sarawak’s economy has not fully recovered to
pre-pandemic level, (-4.10% YoY vs 2019).
• Manufacturing and construction sectors have
recovered.
• Assuming the GDP grow by 5.3% for the next 4
years (2022-2025), it will still fall short of 12MP
target (RM164.3 bil in 2025) by circa 1.9%.
Sarawak’s GDP growth underperformed national level GDP and its 12MP average growth target of 5.3%.
Sarawak GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
0
40
80
120
160
Total A Mi Ma C S
RM mil
Sarawak GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
3.1
2.9
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: Sarawak vs Malaysia (% YoY)
Malaysia Sarawak
-3.2 -3.3 2.1
11.2 10.2
11.0 21.1 28.4 3.4 35.9
Government services
business services
Subsectors
0.0
3.4
5.4
2.3
30.1
21.9
20.3
19.7
plastic products
Transport equipment, other
manufacturing and repair
Subsectors
15.1
-2.2
-7.5
82.1
12.4
5.5
YoY % YoY %
Share % Share %
Economic Profile: Sarawak
11

• Manufacturing approved investment in Sarawak declined -77.3% YoY in
2022 (2021: -64.0%), worse than national level (-56.8%)
• Its share to total approved investment in the sector is also among the lowest
at 1.5% (2021: 2.9%; 5-year average: 9.9%).
• This is quite inconsistent with its significant contribution to national
manufacturing GDP in 2021 at 11% i.e., the 4th largest.
• In 2021, 74% of the manufacturing investments in Sarawak were in E&E
products followed by chemicals & chemical products (25.1%) – both
entirely from foreign sources.
• Socio-Economic Transformation Plan (2016-2030) – driven by Sarawak
Corridor of Renewable Energy (SCORE) with 10 priority industries such
as aluminum-based, steel & other metal-based, solar-based and
tourism focused on new hydro-power lakes.
Industry
Domestic
(RM mil
Foreign
(RM mil)
Total
(RM mil)
Electrical & electronic products 0.0 4,193.0 4,193.0
Chemicals & chemical products 0.0 1,425.0 1,425.0
Wood & wood products 12.0 0.0 12.0
Total 49.9 5,618.0 5,667.9
Investment opportunities: Sarawak
Sources: CEIC, DOSM, MIDA, www.sarawak.gov and SME Bank Economic Research
Sarawak Coastal Road - Muara Lassa Bridge, Mukah (2024)
Bintulu-Samalaju gas pipeline (2025)
Kuching Urban Transportation System (KUTS) Phase 1 (2025)
Baleh Hydroelectric (2027)
Sarawak-Sabah Link Road (SSLR) Phase II (2027)
Pan Borneo Highway Phase 2 / Northern Coastal Highway (2028)
1
2
3
4
5
6
1.3
84.3
0
5
10
15
20
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Sarawak vs Malaysia
Sarawak Malaysia Shares (RHS)
12

• Stretching approximately
89km across Limbang
and Lawas
• 4-lane dual carriageway
of JKR R5 standard
• Provide connectivity for
road-users travelling on
the Pan Borneo Highway
Sarawak (from Telok
Melano to Miri) through
neighbouring Brunei and
onwards to the Pan
Borneo Highway Sabah.
Investment opportunities: Sarawak: Northern Coastal Highway
Sources: www.maltimur.com and SME Bank Economic Research
13

• The primary sectors (agriculture and mining)
contribute a substantial share to the state’s GDP.
With commodity prices (e.g. CPO & crude
petroleum) above pre-pandemic levels, despite
trending downward in recent months, it remains
supportive to Sabah’s recovery.
• However, acute labor shortage especially in palm
oil sector is unlikely to be fully resolved this year
hence remain a critical concern.
• Meanwhile, tourism services are expected to
continue its momentum amid space capacity and
on the prospect of returning tourists from China –
makes up the majority of foreign travelers coming
into Sabah (± 15% of total in 2019).
• In addition, port activities remain bright with
expansion of Sepanggar Bay Container Port – will
be able to handle 1.25 mil twenty-foot equivalent
units (TEUs) from 500k at present.
• Government also plan to develop cities bordering
Kalimantan, Indonesia such as Kalabakan, Sabah
• Sabah’s economy has not fully recovered to
• Assuming GDP grow by 6.5% for the next 4 years
(2022-2025), it will still fall short of 12MP target
(RM106 bil in 2025) by circa 4.6%.
Sabah’s GDP growth underperformed national level GDP and its 12MP average growth target of 6.5%.
Sabah GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
0
20
40
60
80
100
Total A Mi Ma C S
RM mil
Sabah GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
3.1
1.1
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: Sabah vs Malaysia (% YoY)
Malaysia Sabah
-2.4 2.4 1.8
-1.8 7.9
15.9 26.0 7.5 3.0 47.3
Government services
business services
Subsectors
-0.8
6.1
2.6
2.1
34.4
25.0
18.0
14.3
Non-metallic mineral products, basic
metal and fabricated metal products
Subsectors
-8.1
25.0
5.6
11.4
67.1
12.7
11.4
8.8
YoY % YoY %
Share % Share %
Economic Profile: Sabah
14

• Manufacturing approved investment in Sabah soared 72.4% YoY (2021: -
59.3%), in contrast to national level (-56.8%).
• In 2021, close to 90% of the manufacturing investments in Sabah were in
basic metal products – entirely from foreign source.
• Sabah is more reliant on mining & quarrying (26% of GDP in 2021) and
agriculture (15.9%) to be compared with manufacturing (7.5%)
• Nonetheless, Sabah Maju Jaya (SMJ) Development Plan for 2021 to 2025
has outlined manufacturing as 1 of its 3 main economic sectors focus.
• In line, more related investments are seen coming in e.g. Construction of
solar glass panel manufacturing plant from China’s Kibing Group and
copper foil factory from SK Nexilis.
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Basic metal products 0.0 4,286.3 4,286.3
Beverages & Tobacco 9.4 0.0 9.4
Machinery & equipment 4.0 0.0 4.0
Total 482.0 4,379.5 4,861.4
Pan Borneo highway (2024)
Phase 4: Gumusut-Kakap-Geronggong-Jagus East deepwater offshore (2024)
Sand silica project to produce solar panels (2024)
Expansion Sepanggar Bay Container Port (Feb 2025)
Pavilion Harbour City project (2032)
1
2
3
4
5
Investment opportunities: Sabah
Sources: CEIC, DOSM, MIDA, Sabah Economic Development and Investment Authority and SME Bank Economic Research
8.4
84.3
0
10
20
30
40
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Sabah vs Malaysia
Sabah Malaysia Shares (RHS)
15

Investment opportunities: Sabah: Pavilion Harbour City
Sources: Sabah Economic Development and Investment Authority and SME Bank Economic Research
16

Economic Profile: Johor
0
40
80
120
160
Total A Mi Ma C S
RM mil
Johor GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
3.1
2.4
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: Johor vs Malaysia (% YoY)
Malaysia Johor
• Johor’s economy has not fully recovered to
• Manufacturing sector has recovered while
agriculture was not really affected in the first
place.
• Assuming the GDP grows by 5.1% for the next 4
years (2022-2025), it will still fall short of the
12MP target (RM164.2 in 2025) by circa 2.6%.
Johor’s GDP growth underperformed national level GDP and its 12MP average growth target of 5.1%.
business services
Government services
Subsectors
6.7
-1.4
2.0
5.9
26.9
26.6
19.5
17.4
YoY % Share %
plastic products
Subsectors
32.9
22.0
19.6
13.0
YoY % Share %
-2.5
7.0
9.0
7.6
Johor GDP breakdown by sector
0.6
12.9
-7.5 2.6
5.5 -18.0
0.5 31.1 2.6 51.9
SERVICES
MANUFACTURING
YoY %
Share %
• Given the proximity to Singapore, Johor will
benefit from the reopening of the Malaysia-
Singapore border as Singapore tops the list of
tourist arrivals in Malaysia for the first 3Q 2022 at
around 54% of the total.
• Ongoing mega projects such as Johor Baru-
Singapore Rapid Transit System (RTS) and
Electrified Double Track (Gemas - JB) will
provide further support to the state’s recovery.
• Demand for ICT related services remain intact
with Bridge Data Centres expanded into Johor
(Kidex Sedenak business park) – span 3
buildings with combined capacity of 100MW
where phase 1 has completed in 2022 – next to
look out for is phase 2.
• Industries viewed to be benefitting from
datacentres include supply of components (e,g.
generator, servers, storage, cables, desktops)
17

Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Basic metal products - 1,541.5 1,541.5
Chemicals & chemical products 679.9 745.3 1,425.2
Electrical & electronic products 895.7 418.1 1,313.8
Rubber products 454.5 102.5 557.0
Petroleum products (including
petrochemicals)
182.0 38.8 220.8
Others 198.1 167.9 366.1
Total 3,105.4 3,847.5 6,953.3
Electrified Double Track (Gemas - JB) (expected to complete in June 2023)
Equinix Inc - International Business Exchange (IBX) data centre (2024)
Hospital Pasir Gudang (2024)
Related to Integrated Bekok Oil project (2024)
Rapid Transit System Link (RTS) Johor – Singapore (2026)
Mixed-income housing (MIH) project in Iskandar Puteri (2026)
1
2
3
4
5
6
• Manufacturing approved investment in Johor surged 109.7% YoY in 2022
(2021: 2.5%), in contrast to national level (-56.8%)
• Share to total approved manufacturing investment have reversed its
downward trend (2019-2021) by clocking at 17.3% (2021: 3.6%) – the
largest recipient by state.
• In 2021, the biggest contributor (22.2%) were basic metal products, followed
by chemical & chemical products (20.5%) and E&E products (18.9%).
• The top 10 investments were somewhat in line with focus industries of the
state, such as E&E, rubber-based product and petrochemical, oil & gas.
• There are also some emerging industries (expected to drive the state’s
economic growth in the next 2 decades) such as 1) finance, insurance,
real estate & business services; 2) healthcare; 3) ICT, among others
which are mainly centred in the Iskandar Malaysia.
Investment opportunities: Johor
Sources: CEIC, DOSM, MIDA, Invest Johor and SME Bank Economic Research
14.6
84.3
0
10
20
30
40
50
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Johor vs Malaysia
Johor Malaysia Shares (RHS)
18

• Upon completion, RTS will reduces congestion on Johor-Singapore Causeway and encourages more visitors into
Malaysia including those of business.
• Government also plans to improve the highway facilities to Pengerang through the construction of an overtaking lane
on the Senai Desaru Expressway.
• Government will upgrade the North-South Highway in Senai Utara-Sedenak, Johor Bahru from 4 to 6 lane.
• All these improvement in transportation and connectivity will encourage tourism activities besides having potential to
increase real estate activities with Singaporeans buying properties in the state, addressing the glut of unsold luxury
homes – as of 3Q 2022, Johor has the highest volume of overhang houses at 5,348 units
Investment opportunities: Johor: Rapid Transit System (RTS)
SME Profile: Johor
Sources: MyMRT.com, National Property Information Centre (Napic), SME Bank Economic Research
19

• Pulau Pinang’s economy has fully recovered to
pre-pandemic level (4.6% YoY vs 2019), solely
driven by manufacturing sector.
• It seems to be on track in achieving 12MP target
of RM120.4 bil in 2025.
• As the state’s economic structure is dominated by
2 main sectors: services & manufacturing (94.7%
of GDP) – should benefit from the spillover
effect of E&E investment and FDI diversion to
ASEAN amid ongoing US-China tension – but
high competition with Vietnam.
• Although global demand for E&E is currently
slowing down after pandemic boom (US’s Intel
has been laying off workers since last year),
Malaysia is less affected due to competitive cost
relatively e.g. to US based operation. The
medium and long term prospects of the E&E
sector are still intact driven by the global
technology upcycle.
• There are also some emerging industries
(expected to drive the state’s economic growth in
the next decades) such as construction –
Penang Transport Master Plan by 2030 (state
govt project).
• The RM46 bil project will consist of construction
of undersea tunnel, LRT, monorail, highways,
tram, cable cars and Bus Rapid Transit (BRT).
• Among plans to finance the project is through
reclamation of Penang South Islands (upcoming
construction/real estate project to generate
RM16.1 bil of revenue) – also involving relocation
of villages along the site
Pulau Pinang’s GDP growth outperformed national level GDP and its 12MP average growth target of 5.4%.
Pulau Pinang GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
0
40
80
120
Total A Mi Ma C S
RM mil
Pulau Pinang GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
-2.4 -4.1 2.1
12.4 12.9
2.0 0.1 47.3 2.5 47.4
business services
Government services
Subsectors
-1.7
5.4
4.0
4.5
30.3
24.6
19.8
14.4
plastic products
Subsectors
16.5
-0.2
5.0
7.8
71.0
12.7
9.0
7.3
YoY % YoY %
Share % Share %
Economic Profile: Pulau Pinang
20
3.1
6.8
-8
-4
0
4
8
2016 2017 2018 2019 2020 2021
GDP: Pulau Pinang vs Malaysia
(% YoY)
Malaysia Pulau Pinang

• Manufacturing approved investment in Pulau Pinang fell by -82.0% YoY in
2022 to RM13.7 bil (2021: 440.1%) – worse than the national level (-56.8%
YoY).
• Likewise, share to total approved investment in the sector went down to
16.3% in 2022 (2021: 39.1%) – but still the 2nd largest among the states.
• In 2021, almost the entire manufacturing investment came from E&E (97%).
• The top investment was in line with the focus industry of the state which is
E&E – dubbed “The Silicon Valley of the East” due to its critical function to
the global E&E supply chain.
• The state contributes >5% of global semiconductor sales and ~60% of
Malaysia's overall E&E exports.
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Fabricated metal products 579.3 252.0 831.3
Machinery and equipment 331.8 448.9 780.7
Scientific and measuring
equipment
59.9 70.8 130.7
Plastic product 54.0 10.8 64.8
Paper, printing and publishing 33.3 0.0 33.3
Others 22.0 11.0 33.0
Total 1,784.6 74,439.1 76,223.7
Northern Corridor Highway (NCH)
Penang International Airport expansion
Oyster Farming
NCER Single Campus Initiative
Penang Transport Master Plan (2030)
1
2
3
4
5
Investment opportunities: Pulau Pinang
13.7
84.3
0
10
20
30
40
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment:
Pulau Pinang vs Malaysia
Pulau Pinang Malaysia Shares (RHS)
21

Z13 – Transkrian Development Zone
Z15 – Batu Kawan Industrial Zone
Z16 – Greater Butterworth – Permatang Pauh – Bukit
Mertajam Growth Corridor
Z17 – Kepala Batas – Tasik Gelugor Growth Node
Z18 – Seberang Perai Aquaculture Zone
Z19 – George Town Development Zone
Z20 – Penang Kepala Batas National Food Security Zone
Z21 – Balik Pulau – Teluk Bahang Biodiversity Zone
Z22 – Kota Kuala Muda
Investment opportunities: Pulau Pinang
22 Sources: NCER and SME Bank Economic Research

• Kedah’s economy has returned to pre-
pandemic level, (1.0% YoY vs 2019) backed by
manufacturing and agriculture sector.
• Nonetheless, assuming the GDP grows by 6.2%
for the next 4 years (2022-2025), it will still be a
short of 12MP target (RM62.2 bil in 2025) by
circa 2.9%.
• Inflow of investments amid spill over from Pulau
Pinang’s E&E value chain (Kulim Hi-Tech
Park) and reopening of international borders will
help uplift lagged recovery sectors including
services - the biggest chunk of the state’s GDP
share.
• Moreover, the state offered vast tourist
attractions including Langkawi island, Kilim
Geoforest Park, Ulu Muda Eco Park, Payar
island, Dayang Bunting lake, Bujang Valley
Archaeology Museum, Baling mountain and Lata
Bayu waterfall.
• Ongoing/incoming high impact projects such as
Kedah Rubber city and Pulau Bunting
development (hub for tourism, industrialised
offshore aquaculture, petrochemical and
renewable energy) will further boost the state’s
growth.
• Kedah’s Aerotropolis project (airport and
aerospace industry) is expected to spur economic
activity (total cost > RM7 bil). However, federal
government decided to halt the project due to
high cost.
Kedah’s GDP growth outperformed national level GDP, yet underperformed 12MP average growth target of 6.2%.
Kedah GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
0
20
40
60
Total A Mi Ma C S
RM mil
Kedah GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
3.1
3.2
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: Kedah vs Malaysia (% YoY)
Malaysia Kedah
2.6 -4.5 1.9
6.2 -8.4
11.9 0.2 30.5 2.1 54.5
Government services
business services
Subsectors
-2.4
4.1
6.0
3.2
28.5
27.1
17.8
14.0
YoY % Share %
Other Manufactures
plastic products
Subsectors
10.6
8.8
-3.8
-4.5
49.5
21.1
19.6
5.4
YoY % Share %
Economic Profile: Kedah
23

• Manufacturing approved investment in Kedah shrank -81.9% YoY in 2022 to
RM12.0 bil (2021: 1,528.9%). Likewise, its share to national level narrowed
sharply to 14.2% (2021: 33.9%).
• In 2021, the investment was driven almost totally by FDI (99.4%) where E&E
sector contributed 96.8%.
• As the state offers low costs of industrial land and office rent, this could attract
investors and leverage on the spillover from E&E hub and land scarcity in
Pulau Pinang.
• Meanwhile, Kedah remained an attractive destination for global
automakers through Inokom manufacturing facilities (assembly brands
like Porsche, BMW, KIA, Mazda, Hyundai, Mini Cooper, Peugeot, etc.)
• Some emerging industries such as oil & gas are expected to drive the
state’s economic growth in the next decades.
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Electrical & electronic products 63,756.0 63,782.7
Scientific - 1,947.0 1,947.0
Food manufacturing 72.3 - 72.3
Basic metal products 31.3 - 31.3
Transport equipment 20.8 - 20.8
Plastic product 17.0 - 17.0
Drinks & Tobacco 13.8 - 13.8
Others 3.1 8.6 11.7
Total 385.9 65,833.4 66,219.3
Pulau Bunting development (2025)
Bukit Kayu Hitam Special Border Economic Zone (2025)
Northern Corridor Highway (NCH)
Kedah Aerotropolis (2035)
Kedah Rubber City (2035)
1
2
3
4
5
Investment opportunities: Kedah
12.0
84.3
0
10
20
30
40
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Kedah vs Malaysia
Kedah Malaysia Shares (RHS)
24

Z1 – Bukit Kayu Hitam Special Border Economic Zone
Z2 – Perlis – Langkawi – Satun Biodiversity Zone
Z5 – Kedah Rubber City
Z6 – Kota Setar – Pendang National Food Security Zone
Z7 – Alor Setar Heritage City
Z8 – Pedu – Ulu Muda Biodiversity Zone
Z9 – Kedah Maritime Zone
Z10 – Gunung Jerai – Lembah Bujang Eco – Archaeo
Tourism Zone
Z11 – Kulim – Sungai Petani – Gurun Growth Corridor
Z12 – Baling – Pengkalan Hulu – Betong Border Zone
Z14 – Kuala Muda Biodiversity Zone
Investment opportunities: Kedah
Sources: NCER and SME Bank Economic Research
25

• Malaysia Vision Valley (MVV) 2.0, a state-led &
private sector-driven development – a major
catalyst for the state’s long term growth, spans
over 30-year – expected to generate 6.2% - 7.3%
annual GDP growth.
• Various sectors (e.g. construction, real estate,
aerospace manufacturing, IT, healthcare, tourism)
to benefit from the MVV 2.0 development.
• A memorandum of understanding with Turkish
Aerospace Industries has been signed to set up a
helicopter assembly plant at the MVV 2.0 –
development of aerospace component
manufacturing, maintenance, repair and overhaul.
• Acknowledging big potential in aerospace,
Government:
 extend tax incentives to aerospace manufacturing
companies moving operations to Malaysia and
15% tax rates to the C-Suite until 2024.
 extend income tax incentives and investment tax
allowances until December 31, 2025 to promote
capacity expansion in existing companies and
attract investment from new company.
• Negeri Sembilan’s economy has not fully
recovered to pre-pandemic level, (-0.7% YoY
vs 2019).
• Nonetheless, services and manufacturing sectors
have recovered.
• Assuming the GDP grow by 5% for the next 4
years (2022-2025), it will still be a short of 12MP
Negeri Sembilan’s GDP growth underperformed national level GDP and its 12MP average growth target of 5.0%.
Negeri Sembilan GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
0
20
40
60
Total A Mi Ma C S
RM mil
Negeri Sembilan GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
-0.4 -3.4 2.0
7.2 -0.3
6.9 0.4 37.7 2.9 50.9
Government services
business services
Subsectors
1.8
-1.1
5.3
6.7
31.9
26.0
19.8
12.6
plastic products
Other manufactures
Subsectors
9.7
10.6
3.5
-5.9
36.2
33.8
21.8
8.2
YoY % YoY %
Share % Share %
Economic Profile: Negeri Sembilan
26
3.1
3.0
-6
-3
0
3
6
2016 2017 2018 2019 2020 2021
GDP: Negeri Sembilan vs Malaysia
(% YoY)
Malaysia Negeri Sembilan

• Manufacturing approved investment in Negeri Sembilan surged 145.8%
YoY in 2022 (2021: -53.0%), in contrast to national level (-56.8%).
• Likewise, its share to total approved investment in the manufacturing sector
jumped to 8.5% (2021: 1.5%; 5-year average: 3.4%).
• The state government has an ambitious target of RM35 bil investments
for 2023 contributing by various sectors including manufacturing to drive it
up – claimed to have reached 90% in that direction.
• The target said to be achieved via the implementation of various high-
impact investments, such as aerospace, maritime development, and
semiconductor.
• The biggest contributor (34.5%) in 2021 came from transport equipment,
followed by food manufacturing (18.6%) and rubber products (14.6%),
broadly in line with some focus industries of the state, such as aerospace.
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Transport equipment 0 1,001.50 1,001.50
Electrical & electronic products 0.3 304.8 305.1
Textiles and textile products 0.0 150.0 150.0
Mineral & non-metallic products 80.9 37.1 117.9
Others 45.3 27.1 72.4
Total 527.8 2,373.4 2,901.2
Electrified Double Track (Gemas - JB) (June 2023)
Additional blocks at Hospital Ampuan Najihah, Kuala Pilah (2024)
Central Spine Road (2026)
Klang Valley Double Track Phase II (2026)
Malaysia Vision Valley 2.0 (2045)
1
2
3
4
5
Investment opportunities: Negeri Sembilan
Sources: CEIC, DOSM, MIDA, Invest Negeri Sembilan and SME Bank Economic Research
7.1
84.3
0
2
4
6
8
10
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment:
Negeri Sembilan vs Malaysia
Negeri Sembilan Malaysia Shares (RHS)
27

Investment opportunities: Negeri Sembilan: Malaysia Vision Valley 2.0
Sources: NS Corporation, www.uniwall.com.my and SME Bank Economic Research
28

• Melaka’s economy has not fully recovered to
pre-pandemic level, (-4.1% YoY vs 2019). By
sector, only agriculture has recovered.
12MP target (RM51.8 bil in 2025) by circa 2.7%.
Melaka’s GDP growth underperformed national level GDP and its 12MP average growth target of 4.8%.
Melaka GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
3.1
2.0
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: Melaka vs Malaysia (% YoY)
Malaysia Melaka
0
20
40
60
Total A Mi Ma C S
RM mil
Melaka GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
-0.6 -4.4 2.3
3.3 -9.5
10.9 0.1 37.9 2.1 48.8
Government services
business services
Subsectors
-0.0
6.4
5.6
2.8
35.6
21.0
18.3
13.5
plastic products
Motor vehicles & transport equipment
Other manufactures
Subsectors
6.7
5.2
-1.3
1.1
30.2
29.2
22.6
18.0
YoY % YoY %
Share % Share %
• On top of being KL, Selangor and Negeri
Sembilan’s weekend tourists spot, the state
should also benefit from the spillover effects of
the reopening of Malaysia-Singapore border.
• The tourism prospects remain bright with various
efforts to boost tourism sector including Malaysia-
Indonesia collaboration via 'Tukar-Tukar Rasa'
tourism package to attract tourists from Riau.
• In line, Government will upgrade Jalan Tun
Hamzah to Semabok intersection at Lebuh AMJ
Melaka Tengah District to reduce congestion
issue that have been affecting tourist hotspots.
• In addition, Government will extend the Stage
Bus Service Transformation (SBST) program to
the cities of Melaka.
• Many proposals across sectors were also made
e.g. world-class industrial area in Alor Gajah;
military-styled theme park, and if materialised, will
contribute significantly to economic growth
Economic Profile: Melaka
29

Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Rubber products 131.4 0 131.4
Food manufacturing 105.5 0 105.5
Paper, printing & publishing 38.4 0 38.4
Mineral & non-metallic
products
9.8 9.4 19.1
Plastic products 17.2 0 17.2
Fabric metal products 9.4 0 9.4
Others 2.0 0 2.0
Total 367.4 3,554.6 3,922.0
Takungan Air Pinggiran Sungai (TAPS)
Reclamation project – artificial island (2027)
D-8 Education City – Phase 1 (2027)
Expansion of microchip factory, Koa Denko (2027)
1
2
3
4
• Manufacturing approved investment in Melaka expanded 80.8% YoY in
2022 (2021: 100.5%), in contrast to national performance (-56.8%).
• It has also surpassed the state government’s target of RM5 bil.
• Although investments can be lumpy, share to total approved investment in
the manufacturing sector rose to 8.4% (2021: 2%; 5-year average: 3.2%).
• In 2022, most of the manufacturing investments were into the electronics
and semiconductor sector – in line with the state’s main focus area
which is the E&E. This is a continuation from previous trend in 2020 and
2021 where E&E investments made up more than 80% share of
manufacturing investment in the state – almost all were foreign.
• While the state also offers opportunities in areas such as automotive and
aerospace, investments in these were meagre.
Investment opportunities: Melaka
Sources: CEIC, DOSM, MIDA, Invest Melaka and SME Bank Economic Research
7.1
84.3
0
2
4
6
8
10
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Melaka vs Malaysia
Melaka Malaysia Shares (RHS)
30

• .
• Perak’s economy has returned to the pre-
pandemic level, (1.0% YoY vs 2019).
• Manufacturing and agriculture have fully
recovered while services, construction, and
mining & quarrying sectors are still catching up.
• Nonetheless, assuming the GDP grows by 5.6%
for the next 4 years (2022-2025), it will still fall
short of the 12MP target (RM97.4 in 2025) by
circa 2.0%.
• Prior to pandemic (2019), Perak received the
most domestic tourists in Malaysia at 10.1 mil.
In 2021, the state recorded 4.5 mil tourists (2020:
13.2 mil). 22% of the tourists were from Selangor,
while 18.2% from KL. 56.7% of the trips were
made to visit relatives & friends then followed by
for holidays (31.1%)
• Picked as the feature destination at the MATTA
fair, Perak has abundant tourist attractions e.g.
Royal Belum, Matang mangrove, Geopark
Lembah Kinta & Lenggong, Taiping zoo night
safari, Menara Condong, Ipoh and Pangkor
Island.
• Ongoing high impact projects such as
SilverValley technology park and DRB-Hicom
Automotive High-Technology Valley will
provide further support to the state’s growth.
• It also has quite a strong agriculture activities;
• The largest Mango producer (25.1%)
• 2nd largest guava producer (40.8%) after
Johor (41.8%)
Perak GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
0
20
40
60
80
100
Total A Mi Ma C S
RM mil
Perak GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
3.1
3.5
-6
-4
-2
0
2
4
6
2016 2017 2018 2019 2020 2021
GDP: Perak vs Malaysia (% YoY)
Malaysia Perak
Perak’s GDP growth outperformed national level GDP, yet underperformed 12MP average growth target of 5.6%.
Government services
business services
Subsectors
4.3
-1.0
5.6
4.0
32.2
27.5
19.6
12.5
plastic products
Subsectors
9.0
18.0
3.4
4.7
33.6
24.8
15.8
15.2
YoY % YoY %
Share % Share %
3.1 -3.4 2.4
9.2 -6.7
15.3 0.5 20.1 2.5 61.4
Economic Profile: Perak
31

• Manufacturing approved investment in Perak declined by -35.6% YoY in
2022 (National level: -56.8% YoY).
• Share to total approved investment in the sector have reversed its
downward trend (2019-2021) by clocking at 4.6% (2021: 3.1%).
• In 2021, the biggest contributor was food manufacturing (49.9%) followed
by rubber products (37.2%), and chemical & chemical products (6.3%).
• Perak is the home for ASEAN’s biggest “Surimi” food manufacturer (e.g,
fish cake, fish ball, fish snack) QL Food. This has spill over effect to the
fisheries industry- outsource from local fishermen.
• Meanwhile, it also has big players in sectors such as E&E: Unisem,
Carsem, Yamaha, automotive: PROTON and China Railway Rolling Stock
Corp. rubber: Top Glove
• The top 10 investments were somewhat in line with focus industries of the
state, such as E&E, food manufacturing, chemical, rubber and plastic
products.
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Food manufacturing 7.2 3,029.1 3,036.3
Rubber products 1,605.9 653.8 2,259.7
Electrical & electronic products 84.6 0.0 84.6
Mineral & non-metallic products 25.5 0.0 25.5
Others 20.5 0.5 21.0
Total 1,996.5 4,084.8 6,081.3
SilverValley Technology Park (2023)
Lumut Maritime Terminal 2 & 3 (2023)
Construction of Perak Contingent Police New Headquarter
and police quarters
Ipoh Raya Industrial Park (2028)
Ipoh Smart City (2030)
1
2
3
4
5
Investment opportunities: Perak
Sources: CEIC, DOSM, MIDA, MIDF, NCER and SME Bank Economic Research
3.9
84.3
0
2
4
6
8
10
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Perak vs Malaysia
Perak Malaysia Shares (RHS)
32

Z12 – Baling – Pengkalan Hulu – Betong Border Zone
Z23 – Royal Belum Biodiversity Zone
Z24 – Greater Ipoh – Taiping – Pangkor Growth Corridor
Z25 – Slim River – Sungkai Biodiversity Zone
Z26 – Tanjung Malim Automotive Hub
Z27 – Hilir Perak National Food Security Zone
Z28 – Larut Matang Biodiversity Zone
Z29 – Lenggong Unesco
Z30 – Tapah Education City
Investment opportunities: Perak
Z24
33

• Terengganu’s economy has yet to fully
recovered to pre-pandemic level, (-2.4% YoY
vs 2019) as all sectors underperformed.
12MP target (RM164.2 in 2025) by circa 2.6%.
• Terengganu is known for petroleum & chemical
hub in Kerteh – led by Petronas. Petronas Gas
Kerteh has processing capacity of 1.75 bil
standard cubic feet per day which provide 76% of
total gas demand in peninsular Malaysia.
• Apart from that, tourism is also among the key
sectors for the state supported by a list of
destinations from inland to islands such as Kenyir
Lake duty-free zone, Southeast Asia’s 1st tower
drawbridge, islands (e.g. Redang, Perhentian,
Kapas, Lang Tengah).
• Malaysia’s first green energy islands will be
Pulau Redang and Pulau Perhentian, getting 24-
hour low-carbon electricity supply by 2025 – solar
• Moreover, with a cost of RM66.02 bil, East Coast
Rail Link (ECRL) will provide high spill over
effect connecting Terengganu with Klang Valley –
boost tourism activity, develop rural & sub urban
area, logistic/cargo
• Other ongoing/upcoming high impact projects
such as East Coast Highway project (LPT3)
and Mayang Mall (Sogo 1st branch outside Klang
Valley) will further spur economic activity in
the state.
Terengganu’s GDP growth outperformed national level GDP, yet underperformed 12MP average growth target of 6.6%.
Terengganu GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
0
20
40
60
Total A Mi Ma C S
RM mil
Terengganu GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
3.1
3.6
-6
-4
-2
0
2
4
6
2016 2017 2018 2019 2020 2021
GDP: Terengganu vs Malaysia (% YoY)
Malaysia Terengganu
-5.3 3.5 1.2
9.5 2.5
7.8 0.5 37.0 3.2 51.5
Government services
business services
Subsectors
-0.7
4.6
-1.0
3.6
31.4
30.0
22.3
8.3
plastic products
Other manufactures
Subsectors
10.0
8.4
-1.3
94.6
3.4
2.1
YoY % YoY %
Share % Share %
Economic Profile: Terengganu
34

• Manufacturing approved investment in Terengganu dropped by 91.9% YoY
in 2022 – worse than the national level (-56.8% YoY).
• Only RM310 mil manufacturing investment was recorded – the 3rd lowest in
the country (0.4% share), after Kuala Lumpur (0.2%) and Perlis (0.0%).
• In 2021, almost the entire manufacturing investment in Terengganu were in
basic material products (98%), funded entirely by foreign investments.
• The state also is the hub of Kerteh refinery with capacity of 124k barrels
per day (bpd) < Pengerang 300k bpd. Raw material source – Kerteh (local),
while Pengerang (50%-70% from Saudi Aramco).
• The state also has 13 industrial parks (nationwide: ~600) mainly, on wood
& products, F&B, oil & gas, chemical, and E&E. Kerteh Biopolymer Park
(KBP) – hub for biopolymer and bio-based chemical products including
global brand CJ Bio (Korean global leading bio-ingredient producer for feed
and food).
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Basic material products 5.3 3,747.4 3,752.7
Wood & wood products 27.6 - 27.6
Transport equipment 19.0 - 19.0
Machinery and equipment 11.1 - 11.1
Fabricated metal products 7.3 - 7.3
Chemicals & chemical
products
6.9 - 6.9
Food manufacturing 6.8 - 6.8
Total 84.0 3,747.4 3,831.4
Mayang Mall (2023)
Dungun Town Coastal Tourism
Teluk Lipat Coastal Protection Works
Upgrading of Hybrid Solar System Pulau Kapas
East Coast Rail Line (ECRL) 2026
1
2
3
4
5
Investment opportunities: Terengganu
0.3
84.3
0
2
4
6
8
10
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment:Terengganu vs Malaysia
Terengganu Malaysia Shares (RHS)
35

Investment opportunities: Terengganu
Sources: ECERDC and SME Bank Economic Research
36

• Pahang’s economy has not fully recovered to
pre-pandemic level, (5.3% YoY vs 2019).
• Manufacturing sector has recovered while
agriculture was not affected in the first place.
years (2022-2025), it will still be short of 12MP
• Pahang is the home of cold weather tourism
attractions in peninsular e.g. Genting Highland,
Cameron Highland, Fraser Hill, and Bukit Tinggi.
The state is also rich in natural attractions e.g.
Taman Negara, Pahang River and Janda Baik.
• 3rd most visited state by tourist in 2021 after
Johor and Perak.
• 5 top destinations; 1) Pantai Cherating, 2)
Cameron Highlands, 3) East Coast Mall,
4) Janda Baik dan 5) Pantai Teluk
Cempedak
• In line with higher agricultural share-to-GDP,
Pahang is the 3rd largest crude palm oil (CPO)
producer in Malaysia (3.3 mil tonnes) behind
Sabah (4.3 mil) and Sarawak (4.0 mil) in 2022.
• Price of CPO remain supportive to Pahang’s
continuous recovery but severe labor shortage
particularly in the palm oil sector remain a major
concern.
• Ongoing/upcoming major projects such as
ECRL and new road from Habu to Tanah Rata in
Cameron Highlands will provide further support
to the state’s growth.
Pahang’s GDP growth underperformed national level GDP and its 12MP average growth target of 6.3%.
Pahang GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
0
20
40
60
80
Total A Mi Ma C S
RM mil
Pahang GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
3.1
0.9
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: Pahang vs Malaysia (% YoY)
Malaysia Pahang
-0.1 -13.5 -1.4
6.1 18.5
23.5 1.0 23.5 2.9 49.1
Government services
Other services
Subsectors
-1.4
5.4
-19.5
3.7
35.4
26.4
13.8
13.4
plastic products
Motor vehicles & transport equipment
Other manufactures
Subsectors
5.4
11.7
14.9
-8.5
46.8
23.6
16.2
13.5
YoY % YoY %
Share % Share %
Economic Profile: Pahang
37

• Manufacturing approved investment in Pahang decreased by -75.8%
YoY in 2022, worse than the national level (-56.8%).
• In 2021, 90% of the manufacturing investment were in basic metal
products, funded entirely by foreign investment.
• Pahang is the biggest supplier (Lynas) of rare earth elements
(REEs) in Malaysia which are used in a variety of industrial
applications, including electronics, clean energy, aerospace,
automotive and defence.
• Besides Gebeng Industrial Estate (hub for chemical and
petrochemical), Pekan Automotive Park is the hub for manufacturing
of automotive, among the largest after Kedah (foreign automakers)
which are currently occupied by Mercedes Benz, Isuzu, Suzuki and
Volkswagen.
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Basic metal products 0.0 9,440.6 9,440.6
products
0.0 617.8 617.8
Fabricated metal products 85.0 0.0 85.0
Paper, printing and publishing 0.0 67.7 67.7
Minerals products and non-
metal
8.0 0.0 8.0
Rubber product 0.0 1.6 1.6
Total 239.7 10,250.7 10,490.4
Kemaman-Gebeng Water Distribution Pipeline
Development of Pantai Hiburan, Rompin
Tanjung Agas Maritime Park Phase 3 (2025)
Pahang Aerospace City (2026)
1
2
3
4
5
Investment opportunities: Pahang
Sources: CEIC, DOSM, MIDA, ECERDC and SME Bank Economic Research
2.5
84.3
0
2
4
6
8
10
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Pahang vs Malaysia
Pahang Malaysia Shares (RHS)
38

Investment opportunities: Pahang
39

• Kelantan’s economy has recovered to pre-
pandemic level, (+1.2% vs 2019) driven by
services, construction and agriculture.
• Nonetheless, sssuming the GDP grows by 6.7%
for the next 4 years (2022-2025), it will still be a
short of 12MP target (RM34.8 bil in 2025) by
circa 4%.
• Kelantan is known as shopping destination
e.g. free duty zone in Pengkalan Kubor and
Rantau Panjang. Various products such as
dishes, food, clothes and home furnishings can
be bought at a cheaper price.
• With the reopening of Malaysia-Thailand border,
economic activities along the borders should
recover. However, it could be limited by ringgit
depreciation against Thai Baht.
• The 2nd largest sector is agriculture (2021:
22.8% of GDP). Kelantan was the largest
producer for Chili in 2021 (24.7% of national
production). National Self-sufficiency ratio for
Chili (29.3<100 – insufficient).
• The largest Watermelon producer
(30.7%).
• 2nd largest rice producer (13.7%) after
Kedah (37.3%).
• 3rd largest Durian producer (9.3%) after
Johor (27.2%) and Pahang (24.0%).
• Upcoming high impact projects such as 1)
bridges across the Golok River, 2) Integrated
River Basin Development of Golok River Phase 3
(flood mitigation), and 3) Tok Bali industrial park
(fisheries) will provide further support to the
state’s growth.
Kelantan’s GDP growth underperformed national level GDP and its 12MP average growth target of 6.7%.
Kelantan GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
3.1
2.4
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: Kelantan vs Malaysia (%YoY)
Malaysia Kelantan
0
10
20
30
40
Total A Mi Ma C S
RM mil
Kelantan GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
1.0 5.1 2.7
2.1 1.2
22.8 1.4 4.9 1.6 69.2
Government services
Other services
Subsectors
4.5
-1.0
5.7
1.7
37.1
30.0
13.9
10.6
Other manufactures
plastic products
Subsectors
6.2
6.9
0.6
-10.8
38.6
24.9
20.6
15.9
YoY % YoY %
Share % Share %
Economic Profile: Kelantan
40

Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Rubber products 81.3 0 81.3
products
9.5 0 9.5
Total 90.7 - 90.7
Tok Bali Integrated Fisheries Park
Tok Bali Industrial Park
Redevelopment of Pasar Terapung
Palekbang-Kota Bharu Bridge
1
2
3
4
5
• Manufacturing approved investment in Kelantan surged by 994.3% YoY in
2022 (national level: -56.8%), the 3rd consecutive year of expansion.
• In 2022, it increased quite significantly to RM1.0 bil compared to its
historical trend (<RM100mil) – likely to be contributed by Rohm
Semiconductor’s investment of RM0.91 bil. (Rohm’s global ranking: 33rd
by revenue)
• Likewise, its share to total approved investment in the sector increased to
1.2%, above historical trend (2016- 2021: 0.3%).
• Despite a relatively small manufacturing sector contribution (4.9% of GDP),
top global semiconductor player – Rohm Semiconductor - has factory in
Kelantan since 1988. In 2022, the company has proceeded to expand its
overall production capacity by 1.5 times.
• In 2021, the state recorded 2 manufacturing investments: 1) rubber (share
of 89.6%), 2) chemical & chemical products (10.4%).
Investment opportunities: Kelantan
Sources: CEIC, DOSM, MIDA, ECERDC and SME Bank Economic Research
1.0
84.3
0
1
2
3
4
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Kelantan vs Malaysia
Kelantan Malaysia Shares (RHS)
41

Investment opportunities: Kelantan
42

• Perlis’s economy has not fully recovered to
pre-pandemic level, (4.6% YoY vs 2019). Only
services sector has recovered but that could be
due to government services which dominates the
sector (close to 40% share of services sector).
• Assuming the GDP grow by 5.8% for the next 4
years (2022-2025), it will still be a short of 12MP
• Perlis should benefit from the reopening of
Malaysia-Thailand border. Perlis main export
destination was Thailand in 2021 (62.3% of total
state export).
• Government has announced plan to develop
Sanglang port which will add value to the state
economy – to handle petroleum and bulk cargo.
• Besides that, Perlis is known for agricultural
product such as mango “Harum manis”. In
overall, Perlis is the 3rd largest mango producer
after Perak and Sabah.
• Ongoing major projects such as Perlis Inland
Port and Chuping Valley Industrial Area (hub for
green manufacturing, Halal industries, renewable
energy generation, and automotive) will provide
further support to the state’s recovery.
Perlis’s GDP growth underperformed national level GDP and its 12MP average growth target of 5.8%.
Perlis GDP breakdown by sector
SERVICES
MANUFACTURING
YoY %
Share %
0
2
4
6
8
Total A Mi Ma C S
RM mil
Perlis GDP by sector:
2021 vs 12MP target
2021
12MP Target 2025
3.1
1.5
-10
-5
0
5
10
2016 2017 2018 2019 2020 2021
GDP: Perlis vs Malaysia (% YoY)
Malaysia Perlis
-6.0 -2.3 2.3
5.4 0.2
17.4 0.5 8.0 2.6 70.2
Government services
business services
Subsectors
4.8
2.1
-0.8
1.6
39.7
24.3
17.5
10.0
plastic products
Other manufactures
Subsectors
0.4
12.6
2.2
8.6
30.7
25.4
23.4
20.5
YoY % YoY %
Share % Share %
Economic Profile: Perlis
43

• There was no inflow of manufacturing approved investment in Perlis in
2022, leaving the state at the bottom of the investment ranking.
• In 2021, there was only one manufacturing investment which is in the
food subsector.
• Compared to year 2020, Perlis received some investments in chemical,
mineral, metal, and machinery.
• Meanwhile, industries such as logistics and seaport hub are expected
to drive the state’s economic growth in the next decade in addition to
the state’s focus on tourism, halal hub, and agriculture.
Industry
Domestic
(RM mil)
Foreign
(RM mil)
Total
(RM mil)
Food manufacturing - 12.3 12.3
Others - - -
Total - 12.3 12.3
Perlis Inland Port (PIP)
Chuping Valley Industrial Area (CVIA)
FGV Dairy Farm Chuping
Perlis Maritime Corridor
Kangar Sentral
1
2
3
4
5
Investment opportunities: Perlis
Sources: CEIC, DOSM, MIDA, UPU Perlis, NCER and SME Bank Economic Research
0.0
84.3
0
1
2
3
4
0
50
100
150
200
2016 2017 2018 2019 2020 2021 2022
(%)
RM(bil)
Manufacturing Approv. Investment: Perlis vs Malaysia
Perlis Malaysia Shares (RHS)
44

Z1 – Perlis – Kedah – Thailand Strategic Border Zone
Z2 – Perlis – Langkawi – Satun Biodiversity Zone
Z3 – Kuala Perlis – Kangar – Kota Raja Growth Corridor
Z4 – Perlis National Food Security Zone
Investment opportunities: Perlis
45

46
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